U.S. gasoline inventories jumped to a record high in the most recent week even as refiners cut back activity, the Energy Information Administration (EIA) said Jan. 24, while crude stocks rose sharply.
Gasoline stocks rose for an eighth consecutive week, by 4.1 million barrels to a record 259.6 million barrels, compared with analysts' expectations in a Reuters poll for a 2.7 million-barrel gain.
Crude inventories rose by 8 million barrels in the week to Jan. 18, compared with analysts' expectations for a decline of 42,000 barrels.
RELATED: Frac Spread: How Bad Can Venezuela’s Crisis Get?
Refining output pulled back in the most recent week after a period where refineries have been running at high capacity to meet seasonal needs for diesel and heating oil and to feed export demand. But that has produced a glut of gasoline that could potentially spur refiners to back off in coming weeks and as heating oil season recedes.
Gasoline futures dipped on the news, falling 0.2% to $1.383 a gallon. U.S. crude futures were modestly higher, however, causing the refining margin, or crack spread, for gasoline, to fall by 5%.
"Gasoline demand remains anemic, causing a further rise in those inventories. U.S. crude oil production remains near record levels, as well," said John Kilduff, partner at Again Capital Management in New York.
U.S. crude oil futures gained 24 cents to $52.86 a barrel as of 10:24 a.m. CST (16:24 GMT), while Brent lost 18 cents to $60.96 a barrel.
Refinery crude runs fell by 174,000 barrels per day (bbl/d), EIA data showed. Refinery utilization rates fell by 1.7 percentage points, but remain relatively strong, running at 92.9% of capacity.
"It says less product will be coming down the pipe but we are already dealing with very high inventories in gasoline and distillates for this time of year," said Donald Morton, who runs an energy trading desk at investment banking firm H.J. Sims & Co.
Distillate stockpiles, which include diesel and heating oil, fell by 617,000 barrels, vs. expectations for a 229,000-barrel drop, the EIA data showed.
Net U.S. crude imports rose last week by 1.6 million bbl/d.
Crude stocks at the Cushing, Okla., delivery hub fell by 190,000 barrels, the EIA said.
Recommended Reading
Shipping Traffic Freezes Up in Port Waters After Baltimore Bridge Collapse
2024-03-26 - U.S. port of Baltimore traffic was suspended until further notice following a bridge collapse. At least 13 vessels expected to load coal were anchored near the port at the time of the incident.
Segrist: The LNG Pause and a Big, Dumb Question
2024-04-25 - In trying to understand the White House’s decision to pause LNG export permits and wondering if it’s just a red herring, one big, dumb question must be asked.
Permian Gas Finds Another Way to Asia
2024-04-30 - A crop of Mexican LNG facilities in development will connect U.S. producers to high-demand markets while avoiding the Panama Canal.
Exclusive: Chevron Balancing Low Carbon Intensity, Global Oil, Gas Needs
2024-03-28 - Colin Parfitt, president of midstream at Chevron, discusses how the company continues to grow its traditional oil and gas business while focusing on growing its new energies production, in this Hart Energy Exclusive interview.
Midstream Builds in a Bearish Market
2024-03-11 - Midstream companies are sticking to long term plans for an expanded customer base, despite low gas prices, high storage levels and an uncertain political LNG future.